On September 4, 2015, the California Office of Environmental Health and Hazard Assessment (“OEHHA”) provided notice of additional changes to its proposal to establish a website, operated by OEHHA, which would provide supplemental information to the public regarding exposures to listed chemicals.  The September 4 modifications are OEHHA’s second attempt to address industry concerns regarding the original regulatory text, which was proposed in January 2015. 

Background

On January 16, 2015, OEHHA proposed the addition of section 25205 to the Proposition 65 regulations in Title 27 of the California Code of Regulations.  The proposal was intended to make Proposition 65 warnings more meaningful to the public.  Accordingly, the website proposal is designed to make available additional information regarding exposures to listed chemicals for which a Proposition 65 warning is given, including product information in languages other than English.  The website proposal has raised concern amongst some industry representatives that the new regulations will stimulate additional litigation against companies by Proposition 65 plaintiffs.

OEHHA received twenty-four comments in response to the initially proposed regulatory text.  After reviewing the comments submitted, OEHHA modified the text of Article 2 on May 22, 2015.  Noteworthy changes to section 25205 that resulted from the first round of comments included:

• A limitation on the catch-all category of information that could be requested by OEHHA limiting “any other related information that the agency deems necessary,” to information “concerning exposures to listed chemicals for which warnings are being provided . . .”;

• Clarification that manufactures and retailers are not required to perform testing or to develop information for the sole purpose of responding to a request for information by OEHHA;

• Extension of the time period from 15 to 30 days for industry response to a Public Records Act request; and

• Replacement of the term “Confidential Business Information” with the term “Trade Secrets” to ensure consistency with other state laws and regulations.

Comments on the first round of changes to the regulatory text were due on June 15, 2015.  Industry, trade groups and non-profits submitted ten comments on the initial modifications. 

The September 2015 Modifications

In response to the ten comments, OEHHA further modified the regulatory text.  The second round of modifications includes both substantive and technical changes.  Specifically, the September 2015 changes include:

• A more accurate statement of the anticipated functions of the website; 

• Changes to the mechanism by which third parties can request modification of information provided by the website;

• Clarification of the scope of the OEHHA disclaimer regarding information received from third parties; 

• Establishment of a 90-day time period for a business to respond to a request for information issued by OEHHA; 

• Clarification that, with regard to a provided environmental warning, OEHHA is only authorized to request information regarding the source of exposure;

•  Further limitation of the catch-all category of information that could be requested by OEHHA;

• Addition of a new subsection (d), which would allow industry to respond to information requests via trade organizations; and

• Addition of a new subsection (f), which explicitly states that a business is not required to provide information to OEHHA that is subject to legal privileges under California law.

Comments on the additional modifications were due on September 21, 2015.  The full text of the September modifications can be found here.

Implications and Next Steps

The warning website was part of a regulatory reform package, released in January 2015, which also proposed modification of the content of the warnings required pursuant to Proposition 65 (“Article 6”).  Initially, OEHHA projected that the two amendments would be finalized by the close of summer 2015.  However, given the hindrances posed by the rulemaking process, this timeline has been significantly delayed.  At the Proposition 65 Conference held this fall in San Francisco, OEHHA representatives speculated that the regulations would not be finalized until December 2015, at the earliest.  The date on which the website regulation will go into effect is determined by the date on which it is filed with the California Secretary of State.  If it is filed on or before November 30, industry will have to comply with the regulatory requirements by January 1, 2016.

In response to the most recent modifications of the regulatory text, five comments were received.  The comments make the following claims:  (1) the disclosures required by the proposed regulation, constitute compelled speech, and therefore violate the First Amendment to the federal Constitution; (2) OEHHA does not have the statutory authority to request the information required for development of the website; (3) OEHHA should provide a mechanism (in addition to that provided in subsection (a)(5)) by which a business can contest information provided by the website regarding its products; (4) OEHHA should allow businesses six months’ time to respond to a request for information; and (5) the proposed regulation should include a prohibition against the use of information posted to the website in a legal action. 

At the Proposition 65 Conference, OEHHA representatives did not indicate whether they would further modify the regulatory text of proposed Section 25205.  If no further modifications are proposed, the next step in the process would be for OEHHA to submit the proposed regulation to the Office of Administrative Law (“OAL”) for review.  If approved by OAL, or if 30 working days were to elapse with no action by OAL, the regulation would then be filed with the Secretary of State and become effective in one-to-four months.   

Though Industry still has concerns regarding the website, as seen in the last round of received comments, OEHHA has significantly reduced ambiguity in and the burden imposed by the originally proposed regulatory text.  One major point of clarification made by OEHHA is the designation of a 90-day time period that industry is afforded to respond to a request for information.  Furthermore, if the information provided by industry in response to an OEHHA request is to be disclosed pursuant to a California Public Records Act request, industry will now be given 30 days’ notice of such a disclosure, and as much time to object to it, if the request seeks information considered to be trade secrets.  Most significantly, OEHHA has reduced ambiguity regarding protections afforded information submitted to it, changing the regulatory language from “Confidential Business Information” to “Trade Secrets,” and by explicitly stating that a business is not required to provide information that is subject to legal privileges under California law.  Concerns remain that the proposed website will prompt even more private enforcement actions. 

Key Takeaways

OEHHA’s website regulations, as proposed, will change the way many businesses approach their Proposition 65 compliance and risk management strategy.  For one thing, the additional burdens on industry to provide information regarding chemicals for which a warning was provided may discourage businesses from over-warning as a means of avoiding Proposition 65 lawsuits.  Conducting Proposition 65 assessments under attorney-client privilege will also be increasingly important based on the protections of privileged information from disclosure under the website regulations.